In France, a major legislative change as of 1/10/2014 allows the destruction of the bank’s monopoly on paid loans. This kind of regulation has led to the appearance of funding loan platforms, a great intermediary between the real economy and savings. In case you need complete information about crowdlending, all you have to do is read this article!
Crowdlending: what exactly is it?
Often known as “participatory lending”, crowdlending is an alternative means of financing. This kind of loan helps companies and people to give immediately their money or savings to companies they have chosen, for a specific development program. In return, they receive remuneration in the form of income that varies according to the loan period, the debtor, and the characteristics of his project.
What is crowdlending for?
This participative loan is a borrowing option not only for individuals but also for SMEs.
Crowdlending for small and medium-sized enterprises (SMEs) and small businesses (VSEs): very small businesses, as well as small and medium-sized enterprises, are often not able to obtain a loan from banking institutions. This is where participatory financing becomes advantageous. By making their projects public, these companies are likely to encourage other staff and companies to take part. Very small companies as well as small and medium-sized companies have access to many platforms.
Crowdlending for staff: some platforms help staff to get a loan from other organizations or staff in consumer contracts. In France, there is only one platform at the moment, because the regulation of personal loans is quite regulated.
Crowdlending: what are the benefits?
For debtors, this category of loan is one of the best methods to find investment or a crowdlending for specific work, especially when banking institutions are reluctant to seek guarantees in this situation. This tip also helps them to vary their financing methods. As for the lenders, they choose to reinvest their money in work to which they have been committed. The rate also attracts them: this investment policy helps to recover no more than 10% of the amount introduced annually and in each project. A number of platforms offer yields that are likely to reach 12%. In short, a good return comes back faster because the loan payment period can not take more than 7 years and most of the work is paid after 3 to 5 years.